Arina plans to form an investment portfolio that comprised of 50 percent investment in Share X, 25 percent investment in Share Y and 25 percent in Share Z. The following are the estimated returns for all the three types of financial assets: Year Probability (P) Expected

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Arina plans to form an investment portfolio that comprised of 50 percent investment in Share X, 25 percent investment in Share Y and 25 percent in Share Z.

The following are the estimated returns for all the three types of financial assets:

Year

Probability (P)

Expected Return (%) of Financial Assets

 

 

 

X

Y

Z

Strong

0.48

10

15

20

Weak

0.52

10

6

1

 

      Calculate:

  1. Expected return for each share.   
  2. Expected return for investment portfolio of share X, Y and Z.
  3. Standard deviation for the investment portfolio.

   

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